This is how the bidding process works

The bidding process can be used as an alternative to the traditional property sale. In some cases, this method can even achieve a higher price than the conventional approach. Whether initiating a bidding process is worthwhile should always be determined on a case-by-case basis. We'll explain how this sales process works in practice and what you, as a property owner, should absolutely keep in mind. 

Many property owners face the difficult decision of determining the right asking price when selling their property. Setting the price too high can result in no buyers being found. Conversely, if the price is too low and buyers are quickly found, the property will ultimately be sold below its value. A bidding process offers the opportunity to drive the price up through competition. Similar to an auction, interested parties submit bids in a bidding process. In consultation with your real estate agent, you can decide whether a minimum price should be set beforehand.

First, the property is advertised. You should definitely leave this task to a professional real estate agent. They will be able to create a property listing that presents your property in the best possible light and thus makes it attractive to as many bidders as possible. Viewings are usually conducted as group viewings. Within a specified period, interested parties can then submit a bid. The agent can allow interested parties to submit bids in person, by email, or via an online platform. Interested parties can check the current highest bid amount throughout the entire period. Once the agent has evaluated all bids, they can notify the highest bidder.

Conducting a bidding process is particularly worthwhile in certain situations. It is attractive for property sellers seeking a quick sale because they urgently need the funds. It is also beneficial for properties that have previously been unsuccessfully marketed. Furthermore, it is advantageous for properties that are difficult to value because, despite a good location, they are in dire need of renovation. Finally, it is beneficial for properties that could experience high demand and whose selling price could be further increased through a bidding process.

The bidding process differs from a conventional auction in many ways. The highest bid is not legally binding. You can accept the highest offer, but you are not obligated to do so. You can even choose a lower offer if you prefer the other interested parties. Likewise, no one is obligated to actually purchase your property after placing a bid.

A professional real estate agent can support you with their expertise during the bidding process. They will present your property effectively and thereby attract enough bidders. Real estate agents can also benefit from their client databases.

Would you like to know if a bidding process is worthwhile for your property? Contact us. We'd be happy to advise you.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

Photos: © hquality/Depositphotos.com